Canada freezes rebate payments to Tesla, bars it from future programs due to tariffs

Transport Minister Chrystia Freeland announced on Tuesday that Canada has decided to freeze all rebate payments for Tesla and has banned the electric-vehicle maker from participating in future EV rebate programs. This decision comes as a response to the ongoing trade tensions between the U.S. and Canada, with the imposition of “illegitimate and illegal U.S. tariffs” being a key factor in the eligibility requirements for the Incentives for Zero-Emission Vehicles (iZEV) programs.

Freeland stated that no rebate payments will be made until each claim is individually investigated and validated. Additionally, she directed Transport Canada to revise the eligibility criteria for future rebate programs to ensure that Tesla vehicles are not eligible as long as the U.S. tariffs remain in place. This move is aimed at safeguarding Canada’s interests and ensuring fair trade practices.

The decision to freeze $43 million in rebate payments for Tesla comes amidst escalating trade tensions between the U.S. and Canada. President Donald Trump has imposed tariffs on Canadian goods, with automobile tariffs expected to come into effect soon. The freeze on rebate payments for Tesla is part of Canada’s response to these tariffs and the need to protect its economy.

It was reported that Tesla had filed an unusually high number of EV rebate claims in the final days of the program in January. One Tesla dealership in Quebec City reportedly claimed nearly $20 million in public subsidies by documenting over 4,000 electric vehicle sales in a single weekend. This raised concerns about the legitimacy of the claims and prompted the government to take action.

Ontario had previously stopped providing financial incentives for Teslas purchased for use as taxis or ride shares due to trade tensions with the U.S. This decision was part of the government’s efforts to address the impact of tariffs and ensure fair trade practices.

Tesla CEO Elon Musk, who is known for his close relationship with President Trump, has been actively involved in efforts to streamline the federal government and reduce the budget. His influence and connections have raised questions about the company’s involvement in government programs and incentives.

Overall, Canada’s decision to freeze rebate payments for Tesla reflects the government’s commitment to fair trade practices and protecting its economy from the impact of tariffs. By revising eligibility requirements and ensuring transparency in the rebate program, Canada aims to uphold its values and safeguard its interests in the face of trade challenges.